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$1 Billion of USDT Is Sitting on Binance, and That’s Big for Crypto

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Over the past few months, Tether’s USDT stablecoin has become increasingly important to the crypto market; the asset’s market capitalization has swelled as it has surged in adoption, now amounting for much of Ethereum’s network traffic.

Due to the growth, tracking the movement of USDT has given investors novel signals as to potential market trends. One such signal has seemingly appeared, with data indicating that leading crypto exchange Binance now holds a large sum of the stablecoin.

$1 Billion Worth of USDT is Sidelined On Binance

According to data shared by Jason Choi — a Wharton School graduate that is the Head of Research at crypto hedge fund The Spartan Group — there is now just shy of $1 billion worth of Tether “sitting on the sidelines on Binance alone.” This doesn’t count the other stablecoins that platform supports, including Binance USD, USD Coin, Paxos Dollar, and more.

Per the chart, this metric is up 1,000% from the mere ~$100 million worth of USDT on Binance at the $10,500 top in mid-February. A majority of the growth took place after the “Black Thursday” crash in the price of Bitcoin and other crypto-assets.

Why This Is Bullish for Crypto

While a relatively odd metric to keep track of, the exponential growth in the amount of USDT stablecoin sitting on Binance signals one thing: there is likely a rapidly growing level of latent demand for cryptocurrencies.

Considering that the growth of Binance’s USDT was relatively steady, not marked by large spikes indicative of a direct deposit by Tether, it would suggest individual investors are sending their stablecoin onto the exchange en-masse.

The reason: they’re likely waiting to unload their USDT for cryptocurrencies, be that Bitcoin, Ethereum, or otherwise.

Importantly, it isn’t only USDT that has seen rampant growth: the past few weeks have seen a broad resurgence in the total value of stablecoins in existence, with Nic Carter from CoinMetrics indicating that the total value of these assets has been on a steep rally.

“Stablecoins collectively tacked on over $2b in March 2020 – by far their best month ever. Nontether stablecoins grew by $500m.”

As it stands, the value of all stablecoins has passed $8 billion, or approximately 4.2% of the entire public crypto market:

The sentiment goes that the market will reach a point where these investors will want to dump their stablecoin holdings for Bitcoin, causing a rapid rally higher in the crypto market.

Su Zhu, CIO and CEO and hedge fund Three Arrows Capital, summed up this sentiment well when he made the following apt comment in early-2019, a time when there was a mere $2 billion worth of value locked up in stablecoins:

“Theres an estimated $2B in cash sitting at crypto funds/holdcos. Theres another $2B+ sitting in stablecoins, and another $2B sitting at exchanges/silvergate/signature. […] Imagine thinking we need new money to hit $10k.”

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Ethereum price closes in on $4K as Shiba Inu (SHIB) steals Dogecoin’s thunder

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The crypto market has rallied into the weekend as Ether (ETH), Dogecoin (DOGE) and Shibu Inu (SHIB) hit new all-time highs as they lead the pack of altcoins up the market cap mountain. 

Much of the excitement behind Dogecoin’s rally has been attributed to the upcoming appearance of Elon Musk, the CEO of Tesla and a Dogecoin advocate, on the popular Saturday Night Live comedy sketch show. Ether, on the other hand, continues to rally toward $4,000 as institutional interest in the altcoin soars and the approaching London hard fork have investors feeling extra bullish.

Data from Cointelegraph Markets and TradingView shows that after briefly dipping to a low of $3,418 in the late hours on May 8, Ether price regained its composure and proceeded to vault 13% to reach a new all-time high at $3,958. 

ETH/USDT 4-hour chart. Source: TradingView

While some have been surprised by the bullish movement from the second-largest cryptocurrency by market capitalization, it comes as no shock to Cointelegraph market analyst Marcel Pechman who recently detailed how Ether “could easily sustain until $5,000.”

Bitcoin (BTC) has used its time out of the spotlight to quietly climb higher with bulls now attempting to hold the price above $59,000.

Canine-themed ‘meme coins’ lead the pack

Dogecoin has emerged as one of the biggest mainstream attention grabbers in cryptocurrency history as scores of new users got their first taste of crypto trading from the popular meme token.

The week-long build-up in momentum for DOGE led to a 25% surge in the early trading hours on Saturday that lifted its value to a new all-time high at $0.74 before profit-taking dropped the price back below $0.68.

DOGE/USDT 4-hour chart. Source: TradingView

Thanks to the global attention that Dogecoin has attracted, a number of canine-themed projects have arisen, including Shiba In (SHIB), which burst onto the scene following a two-day rally that saw its value launch 1,100% higher to establish a new record high at $0.0000178.

The overall cryptocurrency market cap now stands at $2.463 trillion and Bitcoin’s dominance rate is 44.8%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.